Share Prices & Company Research


01 July 2024

General Election: What are 5 key things for investors to watch?

What impact might the 2024 election have? And why? From stock markets to investment in the UK to pensions, our analysts consider 5 key topics for investors.

1: Could we see changes in the property sector and Real Estate Investment Trusts (REITs)?

Roy Kaitcer, Investment Manager

No matter who wins, the repercussions for the property and REIT sectors will be dictated by the new Government’s monetary policies. This will, of course, translate into impacts for inflation and interest rates. While inflation is cooling it would appear that interest rates will stay higher for longer.

Recent economic headwinds have posed some difficulties for REITs, but the prospect of interest rate cuts could see sentiment improve in the medium-term and Labour has already said it will not introduce rent controls, which could be a negative for the sector if introduced.

2: Will the election have any impact on UK investments?

Alastair Power, Investment Research Manager

The global nature of UK markets is a key consideration for investors. Elections can be extremely distracting and provide a plethora of ‘what ifs?’ that cause investors to become sidetracked from longer-term goals to focus on the short-term. Remembering that the UK market is extremely diverse and global in nature can help overcome this issue.

The significant majority of FTSE 100 constituents generate their revenues from overseas, so assessing how or even if the outcome on July 4th will affect revenues generated from all corners of the world and future business growth prospects could help prevent short-term activity detracting from long-term portfolio returns.

3: Could the UK general election affect pensions and savings?

Jude Cann, Financial Planner

It will be interesting to see how incumbent Chancellor Jeremy Hunt’s decision to abolish the Lifetime Allowance (LTA) plays out. The 2023 Spring Budget removed the cap on the amount people can hold in their pensions before paying tax. Labour initially pledged to reintroduce the cap but, at the time of writing, has since backtracked with Rachel Reeves deciding to drop the plans, saying it would add uncertainty for savers.

Both Labour and the Conservatives pledged to maintain the current pensions triple lock, which sees the State Pension rise annually by whichever is highest: average earnings growth, inflation, or by 2.5%. However, the Conservatives pledged to take this a step further with its triple lock plus policy to increase the tax-free pension allowance annually. It was designed to shelter more pensioners from paying income tax and highlights the importance of planning for the future and considering potential future tax implications.

For savers, there was confirmation there will be a new additional ISA allowance, the British ISA, in March’s Budget. The results of a consultation are currently being analysed and we await with interest the detail of how it can be invested and how the proposal progresses after the election. It has been stated the £5,000 allowance will be on top of the current £20,000 ISA allowance.

4: How might stocks and shares respond to the UK General Election?

James Igoe, Head of Office, Manchester

I think markets have been rather sanguine in anticipation of a Labour Government and that has meant a lot of what we might expect to see in a more tightly run race to this point hasn’t given many pointers as to what may happen post-4th July.

However, if we are to see a Labour Government, we might expect to see housing and housing-related stocks move forward given some of the rhetoric around wanting to improve the housing supply and the various tools that could be implemented to support this within that sector.

A lack of investment into the UK stock market generally has caused concerns around the sustainability of large parts of the UK market and its attractiveness to overseas and domestic investors. This will have to be tackled head on to help improve the prospect of companies listing and remaining on the UK market.

Over the long-term it can be said that markets adjust pre-and post-election to what they expect is coming around the corner. However, over the long-term, a well-managed and well-diversified portfolio is what counts, not speculating on the short-term.

5: Economic growth will remain a key challenge

Alastair Power, Investment Research Manager

Promoting the UK as an attractive business destination will likely remain a key challenge regardless of the party in power.

Business friendly, growth-focused economic policies that encourage global businesses to the UK and incentivise domestic businesses to increase investment spending are key contributing factors to driving long-term economic growth.

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Please note that this communication is for information only and does not constitute a recommendation to buy or sell the investments mentioned. Investments and income arising from them can fall as well as rise in value. The information and views were correct at time of publication but may have changed at point of reading.
The Financial Conduct Authority does not regulate tax planning. The information contained within this article is based on our understanding of legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change.
The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change. You should seek advice to understand your options at retirement.
General Election: What are 5 key things for investors to watch?
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